Blog Post

Digi-Key’s Doherty on Amazon.com vs. Distribution

Digi-Key Corp., one of the largest low-volume high-mix electronics distributors in the world, analyzes everything. Over the years it has tracked its customers’ buying behavior and adjusted its business model accordingly.

Digi-Key launched a low-volume supply chain business in response to customers’ demand for support beyond engineering orders. It was an early adopter of digital content and e-commerce. So when a Digi-Key executive provides perspective on a new element in online competition, such as Amazon.com’s b2b site, it’s worth listening to.

EPS Managing Editor Barbara Jorgensen spent some time with Digi-Key’s Dave Doherty, executive vice president, operations, over the phone just after EDS.

EPS: As a catalog distributor – meaning a specialist in low-volume design and engineering orders — how do you view Amazon.com’s foray into the b2b components space?

Doherty: Amazon b2b is a continued validation of what Digi-Key discovered almost 20 years ago about changing customer preferences when in 1996 we began our e-commerce initiative.

Despite its already impressive growth, e-commerce is still in its early days. Standards and conventions are forming. We can no longer benchmark best practices solely within our industry as our target audience spends more time online. We can see role that aggregation is plays in searching for leisure activities such as flights, hotel room and rental cars through sites like Expedia, hotels.com, Kayak and others. Companies like Domino’s are providing adding functional utility within their sites of walking you through the path to purchase and providing dynamic order status telling you that the pizza has been made and is out for delivery.